Journal of Business Ethics 104 (2):159-173 (2011)
Abstract |
We empirically examine the impact of corporate social responsibility (CSR) on CEO compensation using a large sample of the US firms from 1996 to 2010. We develop and test two hypotheses, the overinvestment hypothesis based on agency theory and the conflict–resolution hypothesis based on stakeholder theory. We find that the lag of CSR adversely affects both total compensation and cash compensation, after controlling for various firm and board characteristics. Our estimates show that an interquartile increase in CSR is followed by a 4.35% (2.78%) decrease in total (cash) compensation. We also find an inverse association between lagged employee relations and CEO compensation. Our results are robust to the correction for endogeneity using instrumental variable approach. Taken together, our results support the conflict–resolution hypothesis, but not the CSR overinvestment argument.
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Keywords | Corporate social responsibility Executive compensation Conflict resolution |
Categories | (categorize this paper) |
ISBN(s) | |
DOI | 10.1007/s10551-011-0909-7 |
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References found in this work BETA
Corporate Social Responsibility Evolution of a Definitional Construct.Archie B. Carroll - 1999 - Business and Society 38 (3):268-295.
Value Maximization, Stakeholder Theory, and the Corporate Objective Function.Michael C. Jensen - 2002 - Business Ethics Quarterly 12 (2):235-256.
Corporate Social Responsibility as a Conflict Between Shareholders.Amir Barnea & Amir Rubin - 2010 - Journal of Business Ethics 97 (1):71 - 86.
Corporate Governance and Firm Value: The Impact of Corporate Social Responsibility. [REVIEW]Hoje Jo & Maretno A. Harjoto - 2011 - Journal of Business Ethics 103 (3):351-383.
Global Rules and Private Actors: Toward a New Role of the Transnational Corporation in Global Governance.Andreas Georg Scherer, Guido Palazzo & Dorothée Baumann - 2006 - Business Ethics Quarterly 16 (4):505-532.
View all 14 references / Add more references
Citations of this work BETA
Corporate Social Responsibility: Review and Roadmap of Theoretical Perspectives.Jędrzej George Frynas & Camila Yamahaki - 2016 - Business Ethics: A European Review 25 (3):258-285.
Doing Well While Doing Bad? CSR in Controversial Industry Sectors.Ye Cai, Hoje Jo & Carrie Pan - 2012 - Journal of Business Ethics 108 (4):467 - 480.
Value-Enhancing Capabilities of CSR: A Brief Review of Contemporary Literature.Mahfuja Malik - 2015 - Journal of Business Ethics 127 (2):419-438.
Board Diversity and Corporate Social Responsibility.Maretno Harjoto, Indrarini Laksmana & Robert Lee - 2015 - Journal of Business Ethics 132 (4):641-660.
Does Corporate Social Responsibility Affect Information Asymmetry?Jinhua Cui, Hoje Jo & Haejung Na - 2018 - Journal of Business Ethics 148 (3):549-572.
View all 20 citations / Add more citations
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